COMPONENTS OF CORPORATIONS
shares which have complete voting rights.
Sec. 5. Corporators and incorporators, stockholders and
members.
Corporators
- are those who compose a corporation,
whether as stockholders or as members.
Incorporators
- are those stockholders or members mentioned in the
AOI as originally forming and composing
the corporation and who are signatories thereof.
Corporators in a stock corporation are called stockholders or
shareholders.
Corporators in a non-stock corporation are called members.
NATURE & CLASSES OF SHARES
Sec. 6. Classification of shares.
The shares of stock of stock corporations may be divided into
- classes or series of shares, or both,
- any of which classes or series of shares may have
such rights, privileges or restrictions as may be stated
in the AOI:
Provided, That no share may be deprived of voting rights
except those classified and issued
as "preferred" or "redeemable" shares,
unless otherwise provided in this Code:
Provided, further, That there shall always be a class or series of
Any or all of the shares or series of shares
may have a par value or have no par value as may be provided
for in the AOI:
Provided, however, That
- banks, trust companies, insurance companies,
- public utilities, and building and loan associations
o shall not be permitted to issue no-par value
shares of stock.
Preferred shares of stock issued by any corporation
may be given preference in the distribution of:
- the assets of the corp in case of liquidation
- and in the distribution of dividends,
- or such other preferences as may be stated in the AOI
- which are not violative of the provisions of this Code:
Provided, That preferred shares of stock may be issued
only with a stated par value.
The board of directors, where authorized in the AOI,
may fix the terms and conditions of preferred shares of
stock or any series thereof:
Provided, that such terms and conditions shall be
effective upon the filing of a certificate thereof with the
SEC.

Shares of capital stock issued without par value
- shall be deemed fully paid and non-assessable
- and the holder of such shares shall not be liable to the
corporation or to its creditors in respect thereto:
Provided; That shares without par value may not be
issued for a consideration less than the value of
P5.00 pesos per share:
Provided, further, That the entire consideration
received by the corporation for its no-par value shares
shall be treated as capital
and shall not be available
for distribution as dividends.
A corporation may, furthermore, classify its shares for the purpose
of insuring compliance with constitutional or legal requirements.
Except as otherwise provided in the AOI and stated in the
certificate of stock, each share shall be equal in all respects to
every other share.
Where the articles of incorporation provide for non-voting shares
in the cases allowed by this Code, the holders of such shares
shall nevertheless be entitled to vote on the following matters:
1. Amendment of the articles of
incorporation; 2. Adoption and amendment of by-
laws; 3. Sale, lease, exchange, mortgage, pledge
or other disposition of all or substantially all of the
corporate property; 4. Incurring, creating or
increasing bonded indebtedness; 5. Increase or
decrease of capital stock; 6. Merger or
consolidation of the corporation with another
corporation or other corporations; 7. Investment of
corporate funds in another corporation or
business in accordance with this Code; and 8.
Dissolution of the corporation.
Except as provided in the immediately preceding paragraph, the
vote necessary to approve a particular corporate act as provided
in this Code shall be deemed to refer only to stocks with voting
rights.
Sec. 7. Founders' shares. - Founders' shares classified as such
in the articles of incorporation may be given certain rights and
privileges not enjoyed by the owners of other stocks, provided
that where the exclusive right to vote and be voted for in the
election of directors is granted, it must be for a limited period not
to exceed five (5) years subject to the approval of the Securities
and Exchange Commission. The five-year period shall commence
from the date of the aforesaid approval by the Securities and
Exchange Commission.
Sec. 8. Redeemable shares. - Redeemable shares may be
issued by the corporation when expressly so provided in the
articles of incorporation. They may be purchased or taken up by
the corporation upon the expiration of a fixed period, regardless
of the existence of unrestricted retained earnings in the books of
the corporation, and upon such other terms and conditions as
may be stated in the articles of incorporation, which terms and
conditions must also be stated in the certificate of stock
representing said shares.
Sec. 9. Treasury shares. - Treasury shares are shares of stock
which have been issued and fully paid for, but subsequently
reacquired by the issuing corporation by purchase, redemption,
donation or through some other lawful means. Such shares may
again be disposed of for a reasonable price fixed by the board of
directors.